Your Right to Know

Ohio’s retirement system covering police officers and firefighters has 90 days to gain 17
years.

State law says pension funds for public employees must be able to pay off their obligations in
30 years or less. But a new report shows it would take 47 years for the troubled Ohio Police &
Fire Pension Fund, which covers 54,000-plus police officers and firefighters in Ohio, plus retirees
and beneficiaries, from more than 900 agencies across the state.

The law requires pension funds that don’t hit the 30-year mark to come up with a corrective plan
in 90 days. Leaders of the Ohio Retirement Study Council want action. But those running the pension
fund don’t want to cut retirement benefits for Ohio’s first responders or ask them to pay more.

John J. Gallagher Jr., the fund’s executive director, said last month that members of safety
forces already have contributed $3.2 billion through additional contributions from their paychecks
and reductions in their benefits that took effect July 1, when a statewide pension revamp began. “I
don’t see the need for more,” he said then.

Yesterday, his spokesman issued a more-genteel statement from Gallagher:

“The most recent valuation shows significant improvement and we anticipate additional
improvement as the changes made to our plan as a result of last year’s pension reform legislation
begin to take full effect. Our board must now develop a plan to reach the 30-year level and will
consider a wide variety of options. The board will begin working on that plan immediately, and will
submit it to the ORSC as required.”

But an unwillingness to fix the problem by ruling out essentially the only two solutions
possible without involving taxpayers — cutting benefits or increasing employee contributions —
doesn’t sit well with Rep. Lynn Wachtmann, the Napoleon Republican who leads the Ohio Retirement
Study Council.

“It’s clear that a majority of board members are absolutely refusing to take their fiduciary
responsibility seriously,” he said. “I got to believe there are at least some people on this board
who want to let the crisis ripen and then to take their badges out and say, ‘We’re police and fire,
taxpayers need to bail us out.’ ... That is not going to be on the table with the legislature.”

In a related problem, spokesman David Graham acknowledged that the Police & Fire Fund only
has enough money to cover retirees’ health-care costs for roughly the next 15 years. To bolster the
sagging pension fund, only 2.85 percent of police and firefighters’ paychecks is allocated for
health care; before June 1, it was 4.69 percent.

As he has in recent months, Wachtmann threatened to dismantle the Police & Fire Fund as a
separate board because of what he perceives as members’ continued intransigence.

“Some of these members are union thugs who know about power and aren’t afraid to use power or
abuse power if they need that to win.”